Guide to this report: Military footwear and service trade suppliers have increased their share of military revenue year by year. 16H1 reached 27%, benefiting from recent military themed events; the fixed increase was approved, and it is planned to raise capital to build an emerging retail format in Jihuayuan. Increased holdings rating, with a target price of 12 yuan. Key investment points: Maintain an increase in holdings rating and maintain a target price of 12 yuan. A supplier of military clothing, shoes and hats, reported 27% of military revenue in the 2016 half-year report, benefiting from recent military theme time drivers; the fixed increase was approved, and plans to raise 4.4 billion yuan to build a new retail business in Jihuayuan. Due to the company's military orders improving, the EPS in '16 was increased to 0.31 yuan (previous value was 0.28), and the EPS for 17/18 is expected to be 0.34/0.38 yuan. Maintain the target price of 12 yuan, corresponding to 32 times PE in 2018. Maintain the “Overweight” rating. Driven by the incident where the US aircraft carrier fleet sailed into the Korean Peninsula, the military industry sector made a strong attack. The US intervention in the North Korea issue has reached a stage of heating up. The tense situation in North Korea has escalated, or used strong force to protect itself. Driven by this incident, the military sector performed well. Furthermore, military work is a key area of mixed reform, and this year is expected to usher in a breakthrough, and the company is also benefiting from mixed military reform. Military products are one of its main businesses, and this incident has benefited the company. The company is the largest military light industry manufacturer in China. Currently, the military goods market accounts for about 70%, and 2016H1 military revenue is 3.32 billion yuan (+21.96%), accounting for 27.95% of the company's revenue. As military reform increases the requirements for intelligent military equipment, on the premise of guaranteeing market share, with R&D strength and supply guarantee capabilities, the added value of the company's individual products will increase dramatically, and future revenue/profit increases can be expected. The fixed increase progressed smoothly, and the implementation of the Jihuayuan project accelerated. The company plans to issue 535 million non-public shares, not less than 823 yuan/share, and raise 4.4 billion yuan in capital, of which 4.1 billion yuan will be used for the construction of Jihuayuan projects in many places. The company uses the world's leading emerging extreme sports as an entry point, integrates restaurants, hotels, and outlet retail business formats, and uses Chongqing and Changchun as pioneers to build a comprehensive “Jihuayuan” commercial real estate project. Currently, various business formats are being built in an orderly manner. Risk warning: There is uncertainty about military supply orders, and Jihuayuan's operating conditions fall short of expectations.